How to Supercharge Your Promotions Strategy for Revenue Optimization

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 2

Introduction

In today’s shifting retail landscape, modern retailers must stay on top of their sales promotions

strategy all year round if they wish to keep their price-sensitive shoppers satisfied. In fact,

according to recent research, when asked about their top business challenges, 60 percent of

retailers cited customer price sensitivity as being one of them. More and more consumers are

buying outside of the traditional holiday shopping season, making it even more critical for retailers

to invest in highly sophisticated promotion management solutions. While holidays and other

traditional shopping periods will always remain strong, the seasonal promotion cycle seems to

slowly fade away. Nothing is stopping consumers from picking up a few holiday gifts for friends and

family at the tail end of summer or grabbing a few gifts in January during the post-holiday sales

period. Consumers demand deals and off-season promotions, such as Amazon’s Prime Day and

Alibaba’s Singles’ Day, which offer customers a way to feel they’re getting a better deal buying out

of season.

To support their sales promotions strategy, retailers must enhance inventory visibility, improve

their forecasting techniques, and enable customers to shop whenever and wherever they want. By

effectively managing their promotions, retailers can attract new and existing customers, increase

revenues, and reduce inventory levels and marketing costs. With these shifts in consumer buying

patterns and behavior, it has become critical for retailers to gain insights into how various customer

segments react to promotions, and how, when and where they shop to meet their changing

expectations. By managing all types of promotions across all channels in a centralized system,

companies now have the capability to coordinate promotions across all departments involved in

the process, from merchandising to marketing and advertising.

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 3

Choosing the Right Promotion Management Solution for Your Business While some retailers are using promotions in increasingly creative ways, most of them are still

unable to adequately manage their promotions due to outdated processes and systems. By

investing in a modern promotion management solution, retailers can drive purchases and

encourage repeat traffic without eroding profits and margins. Retailers must consider the price,

timing, consumer target, merchandising strategy, and store location when staging promotions.

Modern promotions management software and analytics tools provide better insights by cross-

referencing historic, demographic, and other data across multiple sources, which makes it easy to

plan multi-channel promotions that drive sales and improve margins.

Nowadays, retailers of any size can gather vast amounts of information about their customers, with

very little effort. Such data can be fed into modern optimization tools, which project how much lift

a promotion will provide to entice shoppers without destroying margins.

Why Excel Is Not Enough Traditionally, promotions were planned by different teams depending on the channel, which could result in

conflicting messages for the consumer and subpar campaign outcomes. Retailers are now realizing the

need to centralize these activities across channels, geographies, and internal departments. That’s where a

centralized promotion planning and execution system supported by a dedicated, best-in-class solution

comes into play. Although many retailers want to adopt a centralized promotions management approach,

they are attempting to do so using Excel, merchandising, pricing, and ERP systems – which often lack in

sophistication and the ability to capture the level of detail needed to optimize promotions.

Consider the End-to-End Promotions Process Additionally, a better promotions management process is required; automation will only allow retailers to

be inefficient faster. What’s needed is a process that allows retailers to get to market faster and eliminates

any barriers along the way. Once that happens, retailers can start generating more targeted and relevant

promotions that result in more accurate data to analyze, which can be difficult to do when data is gathered

from disparate sources.

Think Outside the Loyalty Card Box Forward-thinking retailers should also consider replacing loyalty card programs with other customer data

collection tools. As loyalty programs expanded, their use has become limited and they no longer are a point

of competitive differentiation for retailers. Beyond such programs, there are multiple ways of collecting

customer data. In fact, most retailers use more than one method, which include virtual loyalty cards using

credit card data, email sign-ups, mobile app downloads, and social media.

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 4

Using Customer Insights for Promotion Effectiveness

Incorporating analytics into the promotion management process is now a key priority for most

retailers seeking to gain true promotional effectiveness. Promotion management is nothing new as

most retailers incorporate promotions into their merchandising strategy to some degree. Better

understanding of how these promotions work or don’t work and why is increasingly important.

Before e-commerce and mobile shopping were the norm, promotion management was much

simpler. Planning and executing a promotion was a straightforward process that involved deciding

what goods or services were to be promoted, making sure that the resources were in place to

launch the promotion, and buying advertising space in relevant media.

However, in today’s omni-channel environment, unpredictable consumers and multiple

promotional vehicles have led to much change and disruption in the way retailers must adapt their

promotion management process in order to achieve promotional effectiveness. Incorporating key

customer insights into the process enables retailers to analyze promotions before and after they

are executed.

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 5

While gaining more insight into customer shopping and buying behavior is a start, taking action on those

insights can truly improve promotional effectiveness. Building this insight enables retailers to gain an

understanding of their customers and help them answer key questions including:

• Which customers are reacting to specific promotions?

• Which promotions lead to cherry-pickers and which ones lead to more loyal customers?

• What promotions do your best customers react to?

• Which promotions increase basket size?

• How are in-store promotions performing vs. online coupons?

With this deep level of customer insight, retailers can better plan their promotional activities to avoid

overstocks, out-of-stocks, and excessive markdowns, all of which will help improve their bottom line. They

can also use this information to target customers with marketing campaigns that are more personal and

relevant.

By conducting impact assessments, businesses can gain insight into how their promotional activities affect

their customers´ behavior, allowing them to simplify decision-making about future actions. It can also

identify opportunities to cross-sell and up-sell that may not have been previously considered.

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 6

Start with the data First and foremost, retailers must have accurate, complete data in order to analyze the effectiveness of

their promotions. Many retailers flounder on this first step because they don’t have a complete view into

data generated from past promotional efforts. They should know if a product was promoted online, in print,

or if it was part of an email campaign. From there, they should know details at a more granular level – for

example, what was the click-through rate for a product promoted via an email campaign to customers? If it

was advertised via a social media or online, how many customers came through that channel and bought

the product? Or, if it was

promoted in a newspaper or

circular, what was the ad size

and what page was it printed

on? Advanced technology

makes it simple for retailers to

gather this type of information

and then analyze it for future

promotions. To prepare for the

upcoming holiday season,

retailers should consider

implementing systems that are

designed to collect,

consolidate, and analyze

promotional data.

Measuring the Effectiveness of Promotions

Consumers are no longer relying on print ads, circulars, coupons, and flyers, they’re now tapping

into new avenues to find deals on products they want. Social media sites – like Facebook, Dealfind,

and LivingSocial – are gaining attention for their ability to help businesses accurately target the

right audiences with their promotions. Over-reliance on traditional forms of advertising may hinder

a retailer’s ability to reach new and existing customers. What’s more, the onslaught of data that

retailers now have access to via loyalty cards and online sales has led to the realization that

promotions should not simply be an arbitrary effort to increase traffic and reduce stock levels.

Rather, promotions should be an integral part of their overall planning process. Which strategies

should retailers thus implement to make the most of their retail promotions?

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 7

Seek out new channels While more traditional methods of promoting products – such as TV and print advertisements, direct mail

or catalogs – may still be effective, retailers need to explore other ways of reaching their target audiences.

According to the BBC, “39% of the young people read every day on computers

and screens, compared with 28% who read each day using printed materials.”

Email campaigns are even beginning to sound antiquated as more and more

people rely on alternative channels for communication and information. Many

retailers have already embraced social media and are creating multi-channel

merchandise and assortment plans. They should also consider how new

channels like Instagram and mobile commerce, or m-commerce, can impact the

effectiveness of their campaigns and grow their customer base. Unlike print or

TV advertising, promoting products through social media and online channels is

far less time-consuming to plan and execute. And, adjustments to such

promotions can be made almost instantaneously.

Make it part of the process

Retailers should make analyzing the effectiveness of their promotions part of

the overall planning process. All too often, this important step is simply an

afterthought. Merchandisers should be trained to leverage new solutions

designed to help analyze the effectiveness of their promotions – and then use

that data when they plan future campaigns. This change in routine could be met

with some resistance, especially for companies that have relied on their planners’ promotional insight

(albeit anecdotal) for many years. Retailers may consider giving their planning teams incentive to use new

technology to help them better analyze the effectiveness of their past promotions.

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 8

Creating Successful Sales Promotions in Five Easy Steps

The digital age has largely contributed to shifting the power from sellers to buyers: consumers are

now in the driver’s seat and always seem to be on the hunt for new deals. Hawk Incentives found

that 89 percent of shoppers name price as a top factor affecting their purchasing decisions. Long

gone are the days when customers were letting themselves be brainwashed by TV commercials and

radio ads. Technology has empowered customers and educated them in ways that were

inconceivable even just two decades ago. Coupon websites have become increasingly popular and

modern price-conscious consumers often visit them with hopes of getting their money’s worth. In

today’s dynamic marketplace, retailers also face stiff competition and need to ensure that they

embrace the latest demand management technologies to satisfy bargain-hungry shoppers.

However, sales promotions can be especially challenging to manage, as they may involve hundreds

of people across the enterprise, from merchants to marketing, and even store managers and

associates. Here are five tips to help retailers create successful sales promotions all year round, so

they can drive more foot traffic into their stores and increase their online and offline conversions.

Copyright 2018 Mi9 Retail. All rights reserved.

The Ultimate Guide to Planning and Executing Flawless Retail Promotions 9

Invest in the Right Tools Effectively managing promotions can be an expensive and time-consuming process that involves multiple

departments across the organization. Cutting-edge retail solutions can simplify the process by coordinating

promotions across all departments and measuring the success of each promotion. These key insights can

then be used to drive smarter decision making. What’s more, modern promotion management tools can

help retailers predict how well a product is going to perform, so they can plan their purchases, allocations,

and communication strategies.

Make Smarter Decisions Quicker Modern technology can empower retailers with the tools they need to take their strategies to the next

level. Actionable analytics can provide a competitive advantage to retailers who can understand and even

predict customers’ shopping patterns. That way, they can seize every selling opportunity proactively and

with ease. To get the best returns possible on their promotions, retailers should both analyze relevant data

in real-time, and once promotions have ended.

Prepare for Important Events Ahead of Time Are you planning a back-to-school campaign? Does your software provider offer the promotions your

customers demand, such as BOGO, buy X get X free, buy X get X percent off, or spend X get X off? Can you

limit your promotions hourly, to offer specials only during lunch hour, for instance? Can you include or

exclude certain products or entire product categories? Can you limit promotions only to certain stores or

channels? Retailers can go the extra mile by investing in a modern promotion management solution that

places no limits on the type of creative promotions they can run.

Remember that Consistency is Key Ensuring you offer the same promotions on your ads, website, store signage, etc. is essential. There’s

nothing more frustrating to customers than finding out they could have paid less for the same item if they

had decided to shop on a different channel. Connected shoppers expect a consistent customer experience

across all channels, so your promotions must be an integral part of your omni-channel strategy. By

providing the outstanding customer experience today’s shoppers crave and offering attractive price points,

retailers can increase brand awareness, attract and retain customers, and achieve higher ROI.

Personalize Your Offers Rewarding some of your most loyal customers by offering them personalized promotions is an effective way

to make the customer experience more engaging and encourage further store visits. Retailers can use POS

solutions to identify who their most valuable customers are and reward them accordingly. Promotions are

also an excellent way to increase up-sell and cross-sell opportunities, as they can attract more customers to

your stores. Customer loyalty programs are another great way to ensure the prosperity of your business by

increasing brand recognition, attracting and retaining more customers, and driving sales.

Copyright 2018 Mi9 Retail. All rights reserved.

10 The Ultimate Guide to Planning and Executing Flawless Retail Promotions

In Summary

Effectively planning, analyzing, and executing promotions has become essential to drive repeat

customer traffic all year round and maximize revenues. Promotions can both influence consumers’

buying behavior and trigger positive emotions in them. By acting upon customer insights derived

from relevant data, retailers can implement a customer-centric strategy that will drive ROI.

Retailers that decide to install best-in-class technology, seek new channels to promote their

products and make measuring the effectiveness of their promotions part of their overall planning

process can reap major benefits. With better insights into what the market will bear for a particular

product, retailers can plan effective promotions to drive online and in-store traffic and increase

sales. As a result, retailers will avoid making unnecessary inventory investments, leading to lower

product obsolescence and higher profit margins at the end of the promotion period.

Copyright 2018 Mi9 Retail. All rights reserved.

11 The Ultimate Guide to Planning and Executing Flawless Retail Promotions

Plan Easily and accurately plan successful future

campaigns, events, and promotions and

incorporate their impact into the overall retail

planning process.

• Promotion Forecasting

• Event & Promotion Creation

• Manual Override

Recommend & Forecast Select the optimal products to promote and then

forecast demand to ensure inventory is available to

meet the promoted demand.

• Promotion Forecasting

• What-if Planning

• Manual Override

Mi9 Retail Promotion Management Solution

Mi9 Retail helps retailers improve their promotion management capabilities to both predict and

analyze promotions for better performance. Coupled with the customer insights module, these

modern solutions can further enhance a retailer’s ability to act upon key customer insights derived

from vast amounts of data to meet customer demand at the right time and channel.

Mi9 Retail helps its clients prepare for and meet changing customer demand. The promotion

management solution allows retailers to better plan, execute and analyze how promotions are

performing. Thanks to the customer insights module, retailers can understand their customers’

behavior better by identifying trends, causal relationships and opportunities inside large amounts

of customer data and act upon those insights accordingly for more customer-centric planning.

Execute Quickly and easily move your planned promotions

through the execution process, getting them to

consumers faster.

• Manage Content & Versions

• Visual Layout Templates

• Online Proofing

Analyze Plan more effective future campaigns by analyzing

the effectiveness and profitability of your

promotional programs.

• Understand Category Impact

• Determine Media Mix

• Measure Ad Spend ROI

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